Nigeria’s economy is said to be growing with Gross Domestic Product (GDP) rate of between 6 to 8 percent in recent years, but there is a wide gap between economic growth and job creation due to closure of major industries in the country. MOSES JOHN in this piece takes a look at factors behind this ugly trend and the possible ways government can revive the manufacturing sector.
In 2011, Nigeria recorded $240.7 billion dollars GDP as the economy expanded by 7.69 percent. This is an increase in the GDP growth rate for the previous year which was put at 6.87 percent. At this present rate, Nigeria’s economy is growing faster than the global and regional average of 3 to 5.2 percent.
But, the concern many stakeholders expressed is the wide gap between economic growth and employment generation. This is because despite positive economic indices, the country’s unemployment figures keep increasing from 19.4 percent in 2010 to 23.9 percent in 2011 even though others faulted the figures saying is higher than what is quoted earlier.
The increase in the number of jobless Nigerians added with relative high inflation level of 10.5 percent has led to the increase in the misery index to 34.4 percent from 32.9 percent in 2010. The gap between economic growth and employment generation has been widened by perennial decay in infrastructure and the total neglect of manufacturing industries in the country.
Textile industry, before now dominated the Nigeria industrial sector. It was the largest employer of labour after government whilst its contribution to Gross Domestic Product (GDP) was second to Food, Beverages and Tobacco sector. In the past textile industry in Nigeria control close to 80 percent of the total markets with total dominance of wax and super print.
The sector then employed more than 2 million people. But, today, the industry control mere 15 percent of local market and its current employment level hover around 17,500.
However, it is a known fact that beyond the textile subsector, the entire manufacturing sector is experiencing a negative growth with dire consequence for job and employment. For instance available data indicates that manufacturing output declined from 7.03 percent in 2009 to 6.43 percent in 2010 with about one million job losses.
In 2009, the Manufacturers Association of Nigeria (MAN) in her annual report disclosed that about eight hundred and thirty four factories (834) was closed across all the geo political zones with over 100,000 job losses just that year alone.
The challenges with the sector has been that of power, smuggling, unrestrained importation of fake and sub-standard textile materials, absence of clear industrial policy, high cost of LPFO otherwise known as black oil, and interest rate instability.
Others are multiple taxation, low demand for made in Nigeria goods, low level of technology, poor water supply and transportation, and high cost of raw materials.
Minister of Labour and productivity, Emeka Wogu who spoke recently on the challenges of the sector, said government was mindful of the peculiar challenges facing the textile sector.
Chief Wogu said the Nigeria textile industrial was once the finest and most vibrant textile industry in the world, because in the 80s, the industry provided about 15000 direct jobs with well over 250 functional factories scattered all over the federation, especially in the northern part of the country.
“In the last decade, however, the sector has slipped into a state of near comatose due largely to a number of reasons you are all familiar with. Government is not resting or watching this job-rich sector fold up and throw its workforce into labour market.
The imposition of high tariff and ban on importation of textile materials are part of government measures to stem the fast eroding tide in the industry. There is also government deliberate effort through huge investment and partnership with private investors at stabilizing power and energy supply to reduce the high cost of black oil (LPFO).
Government is also strengthening institutional governance of agencies saddled with the responsibilities of securing our borders and internal security to provide the much needed industrial peace and police smuggling and dumping of cheap inferior fabrics in our country.
“Government is aiming at reviving this sector through various direct and indirect intervention initiatives. There is massive infrastructural development currently going on at various sectors of the economy which when completed will add value to our locally produced goods so that they can compete favorably globally.
The infrastructural development efforts of government are directed at roads construction, rail network that will link major industrial clusters, port decongestion, education and health care among others”.
Also both the President of Nigeria Labour Congress (NLC) Abdulwaheed Omar and the general secretary of National union of Textile, Garment and Tailoring Workers of Nigeria (NUTGTWN) comrade Issa Aremu said the congress was committed to an economy that would promote jobs creation.
“The road to sustainable job creation, end poverty and insecurity lies in employment generation through value adding processes in agriculture and the extractive industries, as we seek to move our nation from perennial crisis of bad governance and deteriorating condition of living and the paradox of jobless growth.
We must struggle to bridge the gap between the poor and the rich and take measures to align robust growth indices to social reality”.
However, in addressing the growing incidence of poverty and unemployment, government must come up with clear and holistic policy that provides supportive framework and intervention as we witnessed in the financial sector.